The Sampson Company has a division that manufactures standard motorcycles. Their budgeted sales for January and February are 80,000 and 90,000 motorcycles, respectively. They like to finish each month with 20% of the following month's expected sales plus an additional 1,000 motorcycles. The company's budgeted selling price is $20,000 per motorcycle. Sampson buys all its wheels from an outside supplier. Their materials ending inventory is set at 10% of production wheels needed in the current month. There was no ending inventory of wheels in December. The budgeted purchase price is $1,000 per wheel. 1. How many motorcycles should Sampson produce in January? a. 82,000 b. 78,000 c. 80,000 d. 90,000 e. 99,000 2. Assume that Sampson decided to produce 100,000 motorcycles in January, how many wheels should they purchase? a. 110,000 b. 180,000 c. 220,000 d. 200,000 e. 100,000

The Sampson Company has a division that manufactures standard motorcycles. Their budgeted sales for January and February are 80,000 and 90,000 motorcycles, respectively. They like to finish each month with 20% of the following month's expected sales plus an additional 1,000 motorcycles. The company's budgeted selling price is $20,000 per motorcycle. Sampson buys all its wheels from an outside supplier. Their materials ending inventory is set at 10% of production wheels needed in the current month. There was no ending inventory of wheels in December. The budgeted purchase price is $1,000 per wheel. 1. How many motorcycles should Sampson produce in January? a. 82,000 b. 78,000 c. 80,000 d. 90,000 e. 99,000 2. Assume that Sampson decided to produce 100,000 motorcycles in January, how many wheels should they purchase? a. 110,000 b. 180,000 c. 220,000 d. 200,000 e. 100,000